Dollar/Yen Rallies After Trade Balance News

The USD/JPY pair advanced up to 120.08, ending the day around the 120.00 level, extending its tepid rally for a fifth day in-a-row. Ever since bottoming at 118.05 last week, the pair has been advancing slowly, but steadily, mostly as latest disappointing Japanese data suggest the BOJ will extend its stimulus in its upcoming meeting by then ends of October.

Wednesday’s rally came after the Japanese September trade balance posted a deficit of ¥114.5B against market’s expectations of a ¥84.4B surplus. Imports resulted better than expected, falling by 11.1% against market’s forecast of an 11.7% decline, while exports grew by 0.6%.

The 1 hour chart shows that the price has advanced further above its moving averages whilst the 100 SMA accelerated its advance, but remains below the 200 SMA. In the same chart however, the technical indicators have lost their early strength and turned flat around their mid-lines.

In the 4 hours chart, the price stalled its advance around the 200 SMA, whilst the technical indicators are also losing their upward strength but holding well above their mid-lines.

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